Islamabad—The Economic Coordination Committee (ECC) that met here on Wednesday with Finance Minister Senator Ishaq Dar has taken a strategic decision allowing state owned oil marketing company (OMC) Pakistan State Oil (PSO) to alter the existing contract with Kuwait Petroleum Corporation seeking purchase of furnace oil (FO), and jet fuel on 90 days deferred payment with interest free.
Currently the PSO purchases the furnace oil through spot purchasing mode. It only purchases high speed diesel from Kuwait Petroleum Corporation (KPC) and the ECC decision has enabled the government owned company to enter into agreement with KPC for purchase of furnace oil and jet fuel.
The meeting approved the proposal by Ministry of Petroleum and Natural Resources, allowing PSO to proceed for finalizing the Addendum to the existing product sale and purchase contract with Kuwait Petroleum Corporation for supply of furnace oil and jet fuel with the direction to make efforts to improve the payment terms.
“We prefer to go into agreement with KPC for more petroleum products as it extended the POL products with 90 days deferred payment facility without interest,” top PSO official confirmed to Pakistan Observer.. High Speed Diesel is also being provided by KPC under the same facility. The existing agreement between PSO and KPC is operational for almost 15 years for supply of diesel oil along with credit facility for cargo payments being availed by GoP.
Under the prevailing deal, PSO submits the amount in dollars to the account of the government which keeps and uses the same amount for 60 days and then pay to KPC as per the then exchange rates.